The Egyptian pound has weakened beyond 50 per US dollar for the first time since March, marking a significant milestone as the country commits to a more flexible exchange rate. The currency dipped to 50.0036 on the offshore market on Thursday before slightly recovering, according to Bloomberg data.
This is the pound’s lowest level since March 6, when a sharp 40% devaluation helped Egypt secure an expanded $8 billion agreement with the International Monetary Fund (IMF). The IMF deal requires Egypt to maintain a market-driven exchange rate to attract foreign investment and ensure economic stability.
“The current weakness is largely due to year-end seasonality,” said Mohamed Abu Basha, head of research at EFG Hermes. “It’s a period when traders and businesses settle positions, combined with ongoing global dollar strength.” Prior to the March devaluation, the pound’s artificially steady rate over the previous year had deterred foreign investments, making it significantly overvalued in global markets. The move toward a flexible exchange rate is seen as a crucial step to align the currency’s value with market forces and stimulate economic growth.